Best Business Bank Accounts (2024)
Managing the financials associated with your business will be one of the most important tasks you have as a business owner. In order to keep track of everything related to income and expenses, your company should have a separate bank account designed specifically for businesses. This helps keep it separate from your personal expenses and makes reporting much easier in the long run.
With so many options for where to open this bank account, it can feel overwhelming, so we’ve compiled some of the best bank accounts designed specifically for small businesses.
Why does an LLC need to open a bank account?
Maintain LLC status
As an LLC, your business is considered a separate legal entity from you and any other owners. This separation is important, affording the liability protection implied in the name. Obligations and debts of the business are not projected onto the owners because of this status. If you do not maintain a separate bank account for the business, this protection could be in jeopardy as you treat the business as the same entity as yourself. There is a legal requirement to have a separate bank account, at risk of taking on the business’s liability as an individual.
Easier for tax purposes
When it comes time to do taxes, a separate bank account makes it much easier to track all of your income and expenses related to a business. Bank statements will serve as the accurate ledger of these items. If you hire an accountant, you will be able to essentially hand them your bank statement cycle and let them take it from there. With a personal account, it can be time consuming to separate out personal and business expenses, and could lead to costly or illegal errors.
Having a specific business bank account simply looks good to vendors, suppliers, and partners. Being able to show a check, card, or account in the company’s name lends a sense of legitimacy to your business, as it means a bank has vetted you. Gaining the trust and respect of these others can help with your overall reputation.
Developing a relationship with a bank can be advantageous for your business moving forward. Having a business account that shows a history of timely payments, responsible use, and good communication can help you down the line when you need financial support. You’re more likely to get a business loan or additional credit if you can show these things, and investors may like to see it as well.
What to look for when choosing a bank for your business
Business owners are busy, and you don’t want to add more to your plate by visiting the bank multiple times a day every day. While most banks have an online presence at this point, local credit unions do not always.
Be sure the provider has everything you need via online banking or mobile banking, not just check your balances. Take some time to look through the bank’s website and bill pay options, explore their mobile app, and browse their integrations too.
For small businesses, many banks will have certain requirements before you can open an account. This may be a minimum amount of money but usually will have to do with your business itself. You may need to show that you are properly licensed, have any necessary permits, and have formed your LLC through the state officially. The bank will want to be sure you are a legitimate business and can back up your claims before offering you services.
It’s no secret that banking comes with a lot of fees, but the exact numbers will differ at each institution. Business accounts may have higher fees than personal accounts, so be sure you understand exactly what this will entail. Once you have an idea of these fees, including overdraft fees, you can include them in your projected operating costs and not be caught off guard.
How deposits work
Deposits are an important part of banking, especially when you may be making large deposits on a regular basis. You should understand your options for cash deposits and mobile check deposits. Know how long deposits take to hit your account, what deposit limits may be, and any costs associated with wire transfers.
Many banks that offer a business account have specialists on staff who help to guide you as you grow your business. These advisors can be helpful with everything from tax to payroll. If that additional support is important to you, ask about what the bank offers upfront. But even if you just need traditional customer service, be sure the bank has a solid reputation in that area. Use online reviews to get experiences, and ask about hours of availability and how easy it is to speak with an agent.
What you need in a bank for a brand new business may be very different from what you need one, five, or ten years down the line. While you should pay attention to the minimum requirements, also think about what you want from a small business bank as your business needs grow.
Does the minimum daily balance grow? Will you earn cashback on debit card purchases?
Are there high costs for higher amounts of deposits, for example? Switching banks can be a hassle, so you should make sure the one you choose fits where you see your business in the future.
What do you need to open a business bank account?
Each bank may have unique requirements on what they will want to see before they are able to open an account. Most banks will require at least the following:
- Your name, address, and date of birth
- A copy of your certificate of formation or similar document
- The LLC’s Employer Identification Number
- An operating agreement or document showing who is authorized to sign documents on behalf of the LLC
- A form of ID that shows you are the person authorized to sign
- Any business licenses or permits
Before going to any bank, look online or call to be sure you know what to bring and don’t have to postpone. Some banks allow you to open your account online, but if there is a physical presence in your area, it is common for you to be required to meet in person for your application.
Best business bank accounts to look into
Nationwide, Chase is a popular bank for individuals and small business owners alike. Their unique Chase Business Complete Banking account is a combined checking and payment processing account, making it great for any business that accepts card payments. Retailers and food services specifically choose these accounts to support their customers’ payments.
Business owners also enjoy the same-day deposit ability via the Chase QuickAccept reader, where traditional merchant accounts can take 1 to 2 business days. As your business grows, Chase Business Complete Checking offers a higher number of transactions and higher deposit limits.
Chase also offers a number of business credit cards with great sign-up bonuses and rewards, so forming a relationship early can get you great perks down the line.
Bank of America
Despite being one of the country’s largest banks, Bank of America is known as one of the best options for small businesses due to its low requirements and flexibility. Customers with a Business Advantage Banking account can toggle between 2 settings, including one with no monthly service fee after $250 a month is spent.
Bank of America’s accounts can also integrate with other apps like QuickBooks, Google Analytics, Expensify, and other popular tools. If you need more support with these tasks, a team of Small Business Specialists is included to support you.
A fully online bank, Bluevine is known for having no monthly fees or transaction limits and an unusually high-interest rate. Balances up to $100,000 receive 1.5% APY, one of the highest on the market. Your account also includes two free checkbooks and over 90,000 locations that allow you to make deposits.
Bluevine business checking account users enjoy that you can create up to 5 subaccounts to better manage business finances. Each subaccount gets a dedicated account number and earns interest for your business.
With over 5,000 physical branches in 37 states, Wells Fargo has a large national footprint and the reputation to match. It has been named one of the top SBA 7(a) lenders and is well known for approving SBA loans in this context. Business accounts like the Initiate Business Checking Account offer the ability to waive monthly fees, and as you outgrow this account, you can move towards higher tier options.
One perk of this FDIC-insured financial institution is that your debit card and checks can be customized with your startup’s logo. As you build a relationship, you’ll find the bank offers basically every financial product you could need, including payroll, invoicing, tax programs, and business insurance.
US Bank is one of the few remaining banks to offer both a free business checking account and brick-and-mortar locations. Their Silver Business Checking account has no monthly maintenance fee or minimum balance requirements, and you can also obtain small business loans and other banking services.
There are over 2,000 branches of US Bank, making it the choice for small businesses that prefer in-person and human support. Along with their own ATMs, MoneyPass ATMs are also able to dispense cash from US Bank accounts with no additional fees.
Though it is mostly an online bank, Capital One offers a small number of physical locations while still offering many of the perks associated with digital banks. The Basic Business Checking account allows unlimited transactions with no fee, and there are over 70,000 free ATMs in the Capital One network.
Capital One also has a large variety of business credit cards with travel rewards and cashback. These cards have free transaction fees, so this could be a great choice for a business that requires a lot of travel.
Created specifically for businesses that involve a lot of travel, Oxygen is a fintech company formed around travel benefits in business banking. Oxygen even allows you to form an LLC on their app by submitting your application and obtaining your EIN.
Oxygen has four tiers of small business checking accounts, based on your monthly deposit activity and spending. Basic tiers are free with no minimum account balances, while higher ones waive the annual fee after the first year. Higher tiers also come with higher rewards.
Each account comes with a range of benefits, like cashback at partner merchants in food, gas, rideshare, and shipping. Business savings accounts also come with a competitive interest rate and set monthly transactions. You can add cell phone protection, luggage protection, and car rental waivers all through an Oxygen account as well.
Digital Federal Credit Union
For those who don’t like the idea of a big bank, a credit union is often the first choice due to their lower fees and personal services. If you don’t have a credit union in your local community, or can’t find one that meets your needs, Digital Federal Credit Union is available nationwide for membership fees as low as $10.
Small LLCs with low activity can opt for a Free Business Checking account with no maintenance fees or minimum balance requirements. Each account allows for up to 4 business debit cards, free cash deposits, unlimited checks, as well as access to a wide ATM network.
DCU is true to the reputation of credit unions for offering exceptional merchant services. They offer a free feature to switch from old accounts, even contacting billers on your behalf to make the transition smooth.
Should I open a bank account for my LLC?
Yes. LLCs should have their own bank account separate from their personal finances. You should have a personal checking account and a business checking account to simplify your finances and make life easier around tax time.
What bank do most small businesses use?
Most small businesses use a large national banking chain, like Chase or Bank of America. However, you can choose to use any bank you’d like that offers the best business checking accounts. Account holders should make sure their banking needs are met.
What banks pay you to open a business account?
Each bank offers different perks throughout the year, which can include small cash bonuses, ATM fee reimbursements, and cashback on qualifying purchases when you open an account and make an initial minimum deposit.
What is the minimum balance required to open a business account?
Minimum opening deposits can range from $5 to $1,000, with some banks allowing you to open an account with no deposit. Keep in mind that some banks have deposit requirements and average monthly balances to avoid monthly charges.
What are the benefits of opening a business account?
A business bank account is a simple way to separate your personal and business finances, which makes it easier to track costs for taxes and reporting purposes. These accounts are also designed for businesses, which means they may have perks your business can use, like online bill pay, mastercard or visa credit cards, lines of credit, and cash flow tools.
What is the difference between a limited liability company and a corporation?
In an LLC, one or more individuals own the business and are responsible for decisions and management. While it is a separate entity, the LLC is still legally tied to these individuals. Corporations are owned by shareholders and governed by a board of directors, with no legal link to the individual people responsible for the business.
What business structures need a bank account?
Almost every type of business entity in the US will require a separate bank account dedicated to the organization. The exception is sole proprietors (running a sole proprietorship). Since the owner and the company are the same legal entity, a separate online business checking account isn’t necessary.
Do I need an EIN to get a bank account?
In most cases, yes. If your business does not have any employees or meets the requirements to be issued an Employer Identification Number, the IRS does not require you to obtain one, but some banks may. It can be helpful to obtain an EIN just in case it becomes useful.
Can I open a bank account before I form my LLC?
In order to open a business bank account, you’ll need to bring documents that show your business is officially formed and able to operate. This includes articles of formation, licenses, and any other similar documents. For this reason, you cannot open a bank account for your LLC until it has been officially formed.
Do all members of an LLC need to be in the bank account?
This is up to you. If you want all members to be able to write checks, make withdrawals, and deposit money into the account, they will all need to be listed on the bank account and properly authorized. This can also be stated in your operating agreement.